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Wednesday, September 26, 2012

For the last few weeks, I have been communicating with a gentleman who lives in a very large planned community: one of those developments with so many sub-associations and residents that it could certainly be incorporated as its own municipality at some point.

This man (we'll call him Mr. Smith) outlined a litany of serious problems in his community and told a tale of graft, greed and corruption that was hard to believe. Mr. Smith had been doing battle with a group that he described as operating as a de facto master association with no documentary authority whatsoever.

In order to get better, he advised that the community needed a new board, new management and new lawyers. Mr. Smith clearly had goals but no idea how to accomplish them.My first problem when trying to help Mr. Smith was the need to sift through emails that consisted of no less than 20 paragraphs each time. The second challenge was getting Mr. Smith to answer basic questions about what he had previously done to effectuate change, how many of his neighbors supported his efforts and what kind of resources he had amassed to do battle.

At this point, Mr. Smith has little more than a list of serious complaints and a desire to change his community. What he needs is a strategy, some resources and an advocate to assist him. At this point, I am not confident that all of Mr. Smith's assertions are correct nor am I confident that I can assist him. What has resulted from my communications with him is the following checklist for individuals wishing to make real changes in their community and the shortest, most efficient path to take.

1.Always start with communication. If you suspect things are awry, schedule an appointment with the board and see if you can sit down and have a dialogue. It is easier to do this outside an open meeting where the board may feel attacked in front of the membership. If you are given the chance to speak privately with the board, don't start out with accusations; start with questions and listen.

2.If you cannot speak with the board or those communications don't result in change, the next step is to start gathering information.Owners are entitled to review the association's governing documents so review them. It would be more productive to have a list of specific documents you wish to inspect as opposed to a 'fishing expedition' that could take days or weeks. If you are denied the opportunity to inspect your the association's official records, keep track of all communications in that regard.

3.Speak to your neighbors and see if they have had similar experiences and observations. This does not mean slandering the board, making wild accusations that are unsupported or other nonproductive communications. If you are to gather your neighbors' support, you will have to present yourself as reasonable, concerned and legitimate. If none of your neighbors agree with your concerns, that is the first sign that this problem might be exclusive to you and your sensitivities or your unique perspective. If that is the case, your chances of changing an entire community to suit your needs is slim.

4.Contact the Division and/or Ombudsman's Office if the nature of your complaint is the proper subject matter for either of these agencies. These resources are free but your expectations must be reasonable about the length of time it may take them to assist you and their ability to fully resolve the problem.

5.Ask yourself how much you are really willing to spend to make the changes you think are necessary. Most attorneys are not likely to take your case on a pro bono basis and contacting your legislator's office to fight a personal battle with your board is not likely to accomplish your goals either.

6.When you find an attorney with whom you'd like to pursue the matter, keep your communications clear and concise. Avoid editorializing and keep your assumptions and accusations to a minimum. Stick to the facts so he or she can map out the most effective strategy for you. If more than one attorney tells you that you have little to no chance at successfully pursuing your matter, you should listen.

Change can happen in community associations that are in need of it. I've seen and personally assisted individuals making those kinds of changes. However, the folks who are successful at this always have the following in common: they are reasonable and rational, they have significant community support and resources and they have taken the time to map out a sound strategy and follow it diligently to the end. The old saying: "If you don't know where you're going, any road will take you there" really holds true in these situations.

Sunday, September 16, 2012

This past weekend, my husband and I decided to go house hunting for my brother and his wife. There were two new townhouse developments going up near our community and we decided to check them out and report on our findings. The first community seemed like a really good fit for my brother and his family but we decided to take a peek at the second community just to compare.

When we tried to turn into the parking lot for the second development, we were directed to turn around and go back to our own community which was apparently hosting the developer's sales center in our Clubhouse! Imagine our surprise when we heard this news. The sales center had nothing to do with our community at all. When we trudged down to the Clubhouse and asked why this developer would have a sales center inside an entirely different community, we were told that a "deal" had been worked out with the country club months ago.

Was I annoyed that our HOA board had not informed us that our 24/7 manned security was perhaps not so secure now that the community would be open to the general public to accommodate a sales center for a community down the road? You betcha. At the very least, it would have been nice to have been informed of the situation without having to find out about it by chance. As with most things in life though, it is usually easier to ask for forgiveness than for permission so perhaps that was our board's reasoning.

After I simmered down, I realized that in the 4 months since this questionable arrangement had already been in place, nothing bad had occurred in my community. It was business as usual, reinforcing the old maxim that ignorance is bliss.

I have several options at this point. I can continue to fume over the fact that we, as members, were not made aware of this situation and let everyone in my community know about the surprise I stumbled upon. I can overlook it entirely as the Sales Center will be relocated outside our community at the end of November according to the nice sales lady with whom I spoke. I can also look for the positives by acknowledging that the Sales Center has done no harm and might have actually exposed our community to potential future buyers who were more impressed with our community than the one they were trying to visit. No, I have not yet made up my mind about the path I will ultimately take but I am leaning towards the last option.

This experience has reminded me as an association attorney what others might feel about their HOAs on a daily basis. While it is not impossible, there is rarely a joyful surprise in an HOA. More often than not, the surprises in HOAs are of the variety I've described above where boards have taken actions or refused to take actions that might surprise, shock or dismay the members. Of course, the reaction to those surprises are what define who we are as members and as people.

Sunday, September 9, 2012

How many people are under the misconception that Section 8 Housing can be found "somewhere else" but not behind the gated walls of many of Florida's well-manicured condominium, cooperative and homeowners' associations? Think again. You might be surprised to find Section 8 tenants living in beachfront condos and 5-bedroom homes in country club communities.

The Housing Choice Voucher Program sponsored by the Department of Housing and Urban Development (HUD) is more often known by the name Section 8. Qualified applicants who meet certain income requirements receive vouchers used to subsidize the cost of housing. HUD's goal is to provide housing to low and very low income families. Generally, the family's income cannot exceed 50% of the median income for the county or metropolitan area in which the family chooses to live.

Here's the part that most folks don't understand. The family that is issued a housing voucher is responsible for finding a suitable housing unit of the family's choice where the owner agrees to rent under the terms of the Section 8 program. These rental properties must meet certain minimum standards of health and safety but other than that, if the family and the landlord agree, any property is conceivably eligible to take part in the program.

Here's where your community comes into the equation. It is no secret that many owners have experienced or are experiencing financial difficulties in many communities. Some of these owners traditionally rented out their homes or units and others are now being forced to do so as a result of the economy. Section 8 tenants are looking more appealing to many landlords since the Public Housing Agencies for the various counties are a reliable source for their share (usually about 2/3 while the tenant pays 1/3) of the rent each month.

For properties in more upscale communities, meeting the government's criteria for health and safety is not really an issue. Also, the housing voucher is generally larger for properties with more space to accommodate larger families so these upscale properties fit the bill in that regard as well. Owners who are intereseted in participating in the Housing Voucher program can list their properties at GoSection8.com.

The way this works is that the family and landlord sign a lease. The landlord and the Public Housing Agency sign a housing assistance payments contract that runs for the same time as the lease agreement. Some associations are now trying to deny leases where the tenant will be receiving Section 8 assistance. Boards should not attempt to do so without speaking to their association attorney to determine if such denial is legal and supported by their governing documents.

For some communities, having Section 8 tenants has been a positive experience as it has kept homes out of foreclosure. Another added bonus is the fact that those same Public Housing Agencies who pay their share of the rent timely each month must also pay if the owner of the property becomes delinquent in the payment of his or her assessments to the association. Some Public Housing Agencies have tried to argue that the demand for rent statutes do not apply to them but this argument has been successfully defeated in court. Lastly, housing experts say that Section 8 tenants in more upscale communities have benefitted from exposure to communities they otherwise would not have known.

The mention of Section 8 Housing need not strike terror in your hearts. Get informed and discuss the pros and cons of the program with your association attorney before making decisions or taking action.

Monday, September 3, 2012

The Castle Beach Club Condominium Inc., a Miami condominium association, sued Citizens Property Insurance Corporation for breach of contract over a disputed insurance claim. The case was originally filed in Miami but Citizens sought to transfer the suit to Leon County (Tallahassee) by invoking Florida's "home venue privilege".

On August 1, 2012, the Third District Court of Appeals affirmed the trial court's order granting Citizens' request to transfer venue up to Leon County. The Court did this because it found that Citizens:

Is a state entity based on language in the Citizens enabling statute which provides that Citizens is a "government entity that is an integral part of the state...not a private insurance company."

There was no exception to the home venue privilege presented; and

There was no waiver by Citizens of its home venue privilege

Castle Beach Club Condominium argued that the Florida Legislature did not intend for the home venue privilege to apply to Citizens even though the enabling statute (Section 627.351(6)(a)1, F.S. ) is silent on the issue. The 3rd DCA ruled that in the face of such statutory silence, the burden was on the condominium association to prove that the privilege was not meant to apply and that burden of proof was not met. This does leave the door open for our Florida Legislature to address whether or not it wishes to allow Citizens Property Insurance Corporation to retain this kind of legal advantage in the upcoming 2013 Legislative Session.

Castle Beach Club also argued that Citizens is a state entity but not a state agency or state subdivision and thus, it should not be entitled to home venue privilege. The Court rejected that argument based on the enabling language quoted above. Interestingly, this same Court declined in 1979 to grant home venue privilege to the Florida Insurance Guaranty Association (FIGA) after concluding that it was a business entity and "not an arm of the government". When you visit FIGA's website and click on their Frequently Asked Questions, the following is the answer to What is FIGA:

FIGA is part of a non-profit, state-based, statutorily-created system that pays certain outstanding claims of insolvent insurance companies. By paying these claims, guaranty associations protect policyholders and claimants.

That description certainly sounds more like a governmental entity than a private business entity but the current case law says otherwise.

Lastly, Castle Beach Club argued that even if Citizens did have home venue privilege, it had waived that right due to the fact that it had previously litigated similar disputes in Miami-Dade County. The 3rd DCA disagreed with this logic and countered that a waiver of the home venue privilege could only occur through actions in the same case, not different cases.

What exactly could this ruling mean for your condominium, cooperative or homeowners' association as well as for individual Citizens policy holders?

Frankly, it is another reason not to feel great about being a Citizens policy holder. It means you might have to worry about trekking up to Tallahssee should you ever dispute a claim with Citizens. It means that should Citizens decide its venue victory in the Castle Beach Club case is worth duplicating, the vast majority of Florida policy holders can expect to incur additional hassles and expenses to puruse their rights. Some associations may file in Leon County right from the start as a result of this case and others may continue to file locally and hope that Citizens doesn't move for a venue change or that the Florida Legislature amends the enabling statute to waive this privilege.

Isn't being a Citizens policy holder difficult enough at times without the added burden of home venue privilege now being thrown into the mix?

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This blog is intended for general informational purposes only and is not intended to offer legal advice in any form whatsoever. Blog readers are urged to consult their own legal counsel to obtain specific legal advice. The blog author reserves the right to answer or decline to answer any comments. Any answers given to blog comments do not constitute legal advice nor do they create an attorney-client relationship. Offensive or defamatory comments will be removed.